18 January 2012

EU Threatens Hungary With Lawsuit Over Central Bank Law

By Jonathan Stearns

(Updates with Hungarian government reaction starting in seventh paragraph, Verhofstadt in ninth.)

Jan. 17 (Bloomberg) -- The European Union threatened a lawsuit against Hungary for encroaching on the central bank’s independence, pressing Prime Minister Viktor Orban to resolve a dispute that halted talks on international aid for the country.

The European Commission, the EU’s regulatory arm, also started infringement proceedings against Orban’s government for political meddling with the judiciary and the data-protection authority. The commission is sending a warning letter about each of the three matters and ordering Hungary to bring its legislation into line with EU standards to avoid court cases.

“The decisions we have taken are a reflection of our determination to make sure that EU law, both in letter and in spirit, are fully respected,” commission President Jose Barroso told reporters today in Strasbourg, France. “We do not want the shadow of doubt on respect for democratic principles and values to remain over the country any longer.”

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